Taking advantage of senior discounts isn’t the only way to have
more funds once you’ve retired.
Those retirement savings you’ve squirreled away have to last for an
unknown amount of time. But that doesn’t mean you have to give up
on dreams of enjoying new experiences. Here are some ways you can
stretch every dollar of those savings.
Keep tabs on your credit card debt
Credit card debt is expensive so “you’re better off getting a line of credit,” notes CPA Stan Swartz, principal at Infomoney Solutions Inc. While bank interest rates are in the low single digits, credit cards still charge 20 per cent or more if you don’t pay them off each month. The cards do have their benefits though, as there may be purchase insurance or extended warranties or waiving of international currency transaction fees attached. Look for a low interest option or a cashback card, which offers the added bonus of rebates on your purchases. But treat them as debit cards and don’t carry a balance.
Look to your home for options
If you need to increase your cash flow, you could ask about a reverse mortgage, says CPA Michael Massoud,
principal, operations and corporate citizenship with CPA Canada. This option allows qualified homeowners
(who are 55 or older) to receive up to 55 per cent of the value of their home in cash.
“The decision to access a reverse mortgage depends on everyone’s own facts and circumstances. While a
reverse mortgage might not make sense for someone who is flush with cash in a non-registered or tax-free
savings account and has no specific liquidity needs, another person whose retirement savings are mainly held within a RRIF might be able to optimize taxes by accessing money through a reverse mortgage,” says Massoud.
Depending on the housing market where you live – and where you’d like to live, if you did move – downsizing your home is another way to increase your cash flow. Bear in mind, however, that housing prices are sky-high right now, so be sure the sale of your current home can cover the residence you’d like to live in, whether you’ll be buying something smaller or renting.
If the plan is to stay in your home, look for ways to make the costs more manageable. “Repair and maintenance can be expensive, especially when it comes to things like heating and air conditioning,” says Swartz. To keep costs more predictable, he suggests a maintenance contract. Taking another approach, “how about taking in a student who can help with yard work for reduced rent,” says Anne Arbour, education manager at the Credit Counselling Society.
Check what your insurance policies include
Before you buy travel insurance or extended warranties or purchase protection, have a look at the insurance policies you already have, Swartz recommends. They may offer additions to coverage that could save you a bundle. For example, some home insurance policies come with emergency travel medical insurance for trips of up to four days, as well as coverage for some legal matters, at no charge, and some credit cards offer extended warranty protection for purchases. This is helpful for two reasons: You can look to see if there are any savings to be had, but also ensure that you don’t pay for something twice.
Seek out government benefits
Arbour suggests checking out provincial and federal government benefits for seniors. You may be eligible
for prescription drug coverage or other services, and you may also have free access to vaccinations for things like pneumococcal pneumonia and shingles, which provinces would otherwise charge for.
Swartz agrees and also suggests “applying for the benefits that you’re entitled to, or those you think you may be close to being eligible for,” such as Old Age Security, Guaranteed Income Supplement or property tax credits in some provinces. The CRA will tell you if you’re not eligible, he adds, so there’s no harm in applying.
Ask for senior discounts
You’d be surprised how many places offer senior’s discounts and how the definition of “senior” can vary.
The Canadian Association of Retired Persons (C.A.R.P) is open to those aged 50 and above and members receive discounts or benefits from dozens of companies and services, from cell phones to insurance, for an annual fee. Arbour recommends checking out what organizations like this can offer.
Everything from attractions and museums to your local transit system will offer senior’s tickets at a discount. Banks also have senior’s plans that cut or eliminate fees and many stores have “senior’s days”. Even professional services such as dentists and veterinarians may cut their fees.
The bottom line, “ask for a discount,” says Swartz. Even if it’s not advertised that there’s a senior’s discount, you may be pleasantly surprised.
Swartz says that, if you haven’t done any comparison shopping for insurance, phone or internet services, or TV in a couple of years, you can often save simply by examining what you’re paying for and determining
whether you still need it.
Anything that is charged directly to a credit card or is paid by direct debit tends to get forgotten when people are looking at their spending and it can be an expensive memory lapse. While pre-authorized is a convenient way to make payments, be sure to check your list of payments from time to time.
Swartz also suggests shopping around, then calling providers and negotiating better rates. He notes that, if you tell them someone else has offered a better deal, they will usually transfer you to a retention specialist who’s authorized to offer deals.
Lastly, Arbour points out that sometimes you can get goods and services in exchange for volunteering – for example, free rounds of golf if you do volunteer work at the club.
This story first appeared on CPA Canada’s online news site.
The information provided on this page is intended to provide general information. The information does not take into account your personal situation and is not intended to be used without consultation from accounting and financial professionals. Allan Madan and Madan Chartered Accountant will not be held liable for any problems that arise from the usage of the information provided on this page.